National Express faces demand for shake-up

A major National Express shareholder is demanding a radical shake-up of the board to "provide a fresh perspective" and find growth opportunities. The US hedge fund giant Elliott Advisers owns 17 per cent of the transport company, and is putting forward three candidates for new non-executive director roles.

Elliot Advisors wrote to other shareholders yesterday, only days after the Government ruled National Express out of the running for the next rail franchise on the East Anglian routes it currently operates. The US fund said "now is the time to look to the next phase in the company's future, as we believe National Express requires a freshassessment of its growth opportunities and the positioning of its assets".

The group made a point of saying that the move did not signify a lack of support in the management, led by Dean Finch, the former Tube Lines chief executive, since February 2010.

"We see exciting opportunities for National Express and believe existing management has done a commendable job in turning the company around," the Elliott letter said. "National Express faces fierce competitive pressures from European state players who have both strong balance sheets and low costs of capital. Particularly in the highly competitive UK transport market, we expect the company to be increasingly at a significant disadvantage."

National Express said it was already reviewing the board's composition and headhunters were shortlisting potential candidates for non-executive roles. "The board believes that all candidates should participate in a proper selection and evaluation process," the company said. "This will ensure that correct corporate governance is followed and that directors can be appointed to promote the interests of all shareholders."

The three Elliott-backed candidates are the Spanish banker Javier Alarco Canosa, entrepreneur Marc Meyohas and transport guru Chris Muntwyler. The vote will be in early May.